PER SHRI M.C. AGARWAL, J.M. ORDER These are two appeals by assessee who are similarly placed and raise identical questions. They were argued together by same counsel and are, therefore, disposed of by this common order. 2 . We have heard learned counsel for appellant and learned Departmental Representative and have perused material placed before us. relevant facts are that two assessees along with several others are co- owners of property No. 22, Barakhamba Road, New Delhi. property consisted of land measuring 3850 sq. mts. which was granted to their predecessor Shri Kamal Narain Singh by Government of India on perpetual lease vide deed dt. 9th October, 1936. lessee had raised residential bungalow over said land. assessee Atam Prakash & Sons, HUF, had 1/6th share in said property. other assessee Shri Om Prakash had 1/18th share thereof. 3 . Government of India declared area where this property was situate to be commercial area permitting use of land and buildings for commercial purposes. In order that residential property No. 22, Barakhamba Road, New Delhi could be commercially exploited, firm of builders Skipper Sales P. Ltd. entered into agreement to purchase this property from its several co-sharers. Separate agreements dt. 24th June, 1977 were entered between said builder on one hand and respective co-sharers on other. By agreement dt. 24th June, 1977, assessee Atam Prakash & Sons agreed to sell its 1/6th share in said property for sum of Rs. 16 lakhs. However, for certain reasons sale could not materialise and on 6th Oct., 1981, there were two agreements between assessee Ms. Atam Prakash & Sons, HUF and said Skipper Sales P. Ltd. first agreement provided that agreement to sell referred to above would stand modified so as to convert same into collaboration agreement whereby parties can mutually in furtherance of their objects proceed to construct property. agreement provided that multistoreyed building would be erected on said plot No. 22, Barakhamba Road, New Delhi by Skipper Sales P. Ltd. at their own cost and assessee Atam Prakash & sons, HUF would be given 6000 sq. ft. area and 3 garages in said building. agreement provided that two parties would be equally joint owner of said venture with clear understanding that said HUF did not owe any liability or assets other than space agreed to be provided to it on completion of project. agreement mentioned that possession of property had already been handed over to builder (Skipper Sales P. Ltd) on 24th Aug., 1981. By same agreement owner of property (Atam Prakash & sons) granted irrevocable authority to builders f o r obtaining all permissions, sanctions and approvals for development, construction and completion of proposed commercial building on said plot. builders could sell portions of proposed building to prospective buyers. 4 . In terms of initial agreement to sell Skipper Sales P. Ltd. had paid Rs. 7,50,000 to assessee-HUF. This amount was to continue to be retained by assessee as security for due performance by builders. 5. On same date, i.e., 6th October, 1981, there was another agreement between assessee and builders whereby assessee agreed to sell to Skipper Sales P. Ltd. 4000 sq. ft. area and 2 garages of proposed building for consideration of Rs. 11 lakhs. This agreement provided that out of sum of Rs. 7,50,000 paid to assessee as security by Skipper Sales P. Ltd. sum of Rs. 6,50,000 will be appropriated towards consideration of Rs. 11 lakhs after multi-storyed building has been constructed. balance of Rs. 1 lakh was to be refunded by assessee to Skipper Sales P. Ltd. at time of handing over possession of area allocable to assessee out of consideration of Rs. 11 lakhs further sum of Rs. 4,45,000 was paid to assessee by Skipper Sales P. Ltd. as advance and balance of Rs. 5,000 was to be paid at time of execution of deed of conveyance. 6 . Identical agreements were executed between other assessee Shri Om Prakash and Skipper Sales P. Ltd. initial agreement to sell in this case was dt. 24th June, 1977. collaboration agreement was dt. 24th August, 1981. share of this assessee mentioned in these documents as 1/6th. consideration for sale is mentioned at Rs. 16 lakhs and like Atam Prakash & Sons this assessee too by virtue of collaboration agreement was to get 6000 sq. ft. of covered area and 3 garages in proposed building. This assessee too entered into another agreement dt. 24th August, 1981 by which like Atam Prakash & Sons had agreed to sell to Skipper Sales P. Ltd. 4000 sq. ft. of covered area and 2 garages. This assessee too had received similar amounts and stipulations mentioned in case of Atam Prakash & Sons were provided in agreement with this assessee as well. 7. assessee Shri Om Prakash is individual. In asst. order it is stated that assessee had 1/18th share in aforesaid property. assessment order goes on to state that there was partial partition in HUF headed by assessee Om Prakash as result of which he had 1/3rd of 1/6th, i.e., 1/18th share in property. In both cases ITO was of opinion that there has been transfer of property resulting from aforesaid transactions and both assessee had made capital gains which were liable to be assessed to income-tax. He accordingly issued notices to two assessees to show cause why profit arising out of said transaction be not assessed as capital gains. In their reply to ITO, assessees contended that there was no transfer of capital assets by assessees and hence no capital gain had arisen to them. It was also contended that by virtue of collaboration agreement, immovable property in question ceased to retain character of capital asset and on contrary it stood converted into trading assets as on date of collaboration agreement and according to judgment of Hon'ble Supreme Court in CIT vs. Bai Shirinbai K. Kooka (1962) 46 ITR 86 assessee can be subjected to tax in respect of difference between sale proceeds realised on disposal of such asset and market price prevailling on date when such asset was converted into trading asset. According to assessee, building was yet to be constructed and hence no income had actually arisen to assessee. It was contended that amounts received by assessees under various agreements referred to above were merely advances. 8. ITO as well as IAC to whom reference was made in terms of s. 144B of IT Act did not agree with assessee's contentions. ITO came to conclusion that on close reading of collaboration agreement, it was clear that transaction was not short of sale of immovable property. According to learned ITO, collaboration agreement was adopted as via media to overcome points that were coming in way for execution of agreement to sell. ITO observed that factually it was case of barter, i.e., assessee has surrendered his right in plot and in turn acquired rights to receive covered area as mentioned above. ITO concluded that transfer or fights had taken place in accounting year relevant to assessment year under consideration and assessee had acquired rights in covered area of value of Rs. 16,50,000. According to him, this amounted t o transfer as defined under s. 2(47) of IT Act and learned ITO determined net taxable capital gains at Rs. 8,87,000 as under in case of Atam Prakash & Sons, HUF : "Capital gain : Rs .Sale consideration as per agreement to sell 16,50,000 While accepting sale consideration facts ofthe assessee's having sold 4000 sq. ft. covered area +2 garages for Rs. 11,00,000 and rate of booking in relevant period, i.e. Rs. 250 sq. ft. has been kept in view. Less cost of acquisition as on 1st Jan., 1964 as per WTorder in case of Om Prakash AtamPrakash, HUF 1,66,667 from where property has fallento share of assessee 14,83,333 Less : Basic exemption 5,000 14,78,333 Less : 40 per cent thereof as property is more than20 years old as per details given in collaboration 5,91,532 agreement 8,87,001" In case of assessee Om Prakash however, ITO determined taxable amount of capital gains at Rs. 5,87,083 in following manner : Rs. "Sale price of 1000 sq. ft. Rs. 425 per sq. ft. 4,25,000 Sale price of 5000 sq. ft. at average rate of Rs. 20,75,000 415 per sq. ft. for 1st to 7th floor Sale price of there garages at Rs. 10,000 each 30,000 25,30,000 Less : Cost as discussed above 1,66,667 23,63,337 Assessee's 1/3rd share 7,87,777 Less : Exemption under s. 80T 5,000 7,82,777 Less 25 per cent 1,95,694 5,87,083" sale price of Rs. 425 per sq. ft. and Rs. 415 per sq. ft. have been adopted in respect of built up area which this assessee was to get on basis of rates fixed by builder Skipper Sales P. Ltd. for sale to prospective buyers. 9 . assessee preferred appeals to CIT (A), who vide separate identical orders confirmed ITO's action. According to learned CIT (A), following issues were involved in appeals : (a) Whether there is any capital asset which could be transferred; (b) Whether transfer has taken place during year under consideration; (c) Whether absence of registered documents makes transfer incomplete. learned CIT (A) held that right to exploit immovable property by constructing multi-storeyed building in capital asset by itself. According to him, ownership of land continued to be with appellant whereas builder was giving right to erect superstructure except built up area earmarked for owners. Dealing with question of absence of any registered document conveying any rights to builders learned CIT (A) observed that along with collaboration agreement assessee executed irrevocable power of attorney in favour of builders giving them right to do all necessary things for construction of multi-storyed complex on land in question; that builders were in their turn assuring prospective buyers that they would get heritable and transferable rights. learned CIT (A) also observed that after building is completed, transfer of property to limited company or society was in contemplation. According to him, deeds of collaboration and power of attorney did not require registration and by these documents, owners had irrevocably transferred right of exploiting their immovable property and non-registration of these documents is not fatal to completion of these documents. learned CIT (A) also held that capital gains arose in accounting year in question. assessee's appeals were dismissed with aforesaid findings. 10. learned counsel for assessee contended that in this case no transfer of property has taken place and hence no capital gain could arise. According to him, assessees have leasehold rights in land and ownership rights in building standing registered and these rights could be transferred only through registered sale deed. Admittedly all agreements referred to above are unregistered documents. In support of proposition that in absence of registered deed of conveyance no transfer of immovable property takes place he relied upon - Sushi Ansal vs. CIT (1986) 58 CTR (Del) 22 : (1986) 160 ITR 308 (Delhi), CIT vs. Hans Raj Gupta (1982) 28 CTR (Del) 82 : (1982) 137 ITR 195 (Delhi), Nawab Sir Mir Osman Ali Khan vs. CWT (1986) 57 CTR (SC) 89 : (1986) 162 ITR 888 (Sc), Addl. CIT vs. Mercury General Corpn. (P) Ltd. (1982) 26 CTR (Del) 171 : (1982) 133 ITR 525 (Delhi) and CIT vs. Bhurangya Coal Co. (1958) 34 ITR 802 (SC). According to learned counsel for assessee, there was no transfer or any asset even by extinguishment of any right as contemplated in s. 2(47) of IT Act as extinguishment must be of all rights held by assessee and not merely diminution in totality of rights held by assessee. For this proposition he relied upon judgment of Hon'ble Gujarat High Court in CIT vs. Vania Silk Mils (P) Ltd. (1977) 107 ITR 300 in which Hon'ble High Court held that in phrase 'extinguishment' of any rights therein words 'any rights' must include all rights. learned counsel for assessee contended that by giving builders Skipper Sales P. Ltd., right to build assessee had not surrendered or transferred all his rights and two assessees still continued to be lessees of land and with built up areas that they would get in proposed building they would continue to use land directly as well as indirectly by existence of their respective portions on land in question. learned counsel also relied upon judgment of this Tribunal in case of Ashok Kapur (HUF) vs. ITO (1985) 12 ITD 520 (Del). According to him, that case related to adjoining property, i.e., No. 21, Barakhamba Road, New Delhi and in that case also owners of that property had entered into similar agreement with builder and Tribunal held that no capital gains arose from transaction. 1 1 . learned Departmental Representative on other hand contended that by virtue of various agreements assessee had for all practical purposes transferred land to builders with effect that assessee's right to build upon land was extinguished and, therefore, there was extinguishment of rights in land within meaning of s. 2(47) (ii) of IT Act, 1961 and there was thus transfer of capital asset. According to him, it was not necessary that entirety of bundle of rights in capital asset should be extinguished. According to him, to effect extinguishment of right to build on land ordinary agreements as entered into between assessees and builder were enough and no registered document was necessary. According to him, transaction should be looked upon with reference to its real effect and not to mere form and fact that assessees have not completed transfer as envisaged in original agreement to sell should not be allowed to avoid taxes on substantial gain made by him then. 1 2 . Under s. 45 of IT Act, 1961, gains arising from transfer of capital asset are chargeable to income-tax.'Capital asset' has been defined in s. 2(14) to mean property of any kind held by assessee. assessees in question were lessees of land forming part of plot No. 22, Barakhamba Road and they owned building that stood thereon. These facts are admitted and thus assessees did own capital asset being Bungalow No. 22, Barakhamba Road, New Delhi. In present property, if any, that has been transferred to so-called builder Skipper Sales P. Ltd. and whether there is transfer of 'capital asset', i.e. of property. 'Transfer' has been defined in s. 2(47) of Act as under: "Transfer" in relation to capital asset, includes : (i) sale, exchange or relinquishment of asset; or (ii) extinguishment of any rights therein; or (iii) compulsory acquisition thereof under any law; or (iv) in case where asset is converted by owner thereof into or is treated by him as, stock-in-trade of business carried on by him, such conversion or treatment;" 13. It was conceded by learned Departmental Representative that in order to complete transfer of property No. 22, Barakhamba Road, New Delhi, registered deed of conveyance was necessary and since no such document has been executed as was contemplated in first agreement to sell, this property as such cannot be said to have been transferred to builder Skipper Sales P. Ltd. This was so because recently Hon'ble Supreme Court in case of Nawab Sir Mir Osman Ali Khan (supra) has reiterated law that title to immovable property does not pass to buyer unless sale deed is executed and registered according to law. In that case assessee, Nizam of Hyderabad owned certain private properties which he agreed to sell to certain of Hyderabad owned certain private properties which he agreed to sell to certain purchasers. Nizam had received entire sale price and had handed over possession of properties concerned to purchasers but no sale deeds were executed in favour of vendees. Hon'ble Supreme Court held that properties continued to belong to Nizam and were to be included in his net wealth for purposes of assessment to wealth-tax. In view of law as laid down by Hon'ble Supreme Court, in this case and in view of fact that no sale deed has been executed and registered in favour of builders it cannot be said that there is transfer of property No. 22, Barakhamba Road, New Delhi in favour of said builders. 14. However, learned Departmental Representative contended that definition of transfer has been widened in s. 2(47) of Act and "the extinguishment of any rights therein" also amounts to transfer of property. According to him, right to build on property gets extinguished by virtue of various agreements. owners thus cannot raise any building on this land and that right having got extinguished, there is transfer within meaning of s. 2(47). learned counsel there hand, had contended that extinguishment of rights can amount to transfer only if all rights that assessee has in property are extinguished and there would not be any transfer if merely by virtue of grant of some of those rights by assessee to third person, there is diminution in bundle of rights that assessee possessed. In order to solve this controversy, it would be proper if we have fresh look at mutual rights created by various agreements entered into between assessee and said builders. Initially as already stated, there was agreement to sell. It is to be remembered that this was not freehold property. land belonged to Government of India and leasehold right that assessees possessed could not be transferred without sanction of Government. Apparently no such sanction appears to have been granted. agreement to sell was arrived at in June 1977 and having failed to perform their respective parts under said agreement for more than 4 years, parties i.e., assessees and builder had to take recourse to another agreement called collaboration agreement. By this agreement, which is found at pages 35 to 44 of paper book, in case of Atam Prakash & Sons, agreement to sell was abandoned as due to diverse circumstances and reasons it had not been possible to execute sale deed. collaboration agreement provided that two parties have agree to sell convert agreement to sell into agreement to sell into agreement of collaboration so that they can mutually in furtherance of their objects proceed to construct property. it was provided that parties shall be joint owners of said venture though possession had been handed over to builders on 24th Aug., 1981 and that builders undertake to develop said plot at their own cost, expenses, etc., after procuring requisite permission. builders were given authority to obtain such permissions. details of consideration have already been described. builders were given power to transfer portions of building under contemplation either before or after building is ready. similarly assessees were also free to transfer areas allocable to them. It was also provided that collaboration agreement shall not ever be deemed to constitute any partnership agreement between owners and builders and agreement was subject to force major clause. builders expressly under took not to do any set or be guilty of any omission which may in any manner contravene terms of perpetual lease granted by Govt. building material of existing structure was on demolition to be appropriated by builders to themselves. Thus what was intended by this agreement was to raise multi-storyed building on land forming part of plot No. 22, Barakhamba Road in conformity with relevant municipal byelaws and in coformity with terms of lease granted by Government in favour of assessees. building was to be raised by builders at their own costs and owners i.e. assessees were to be given specified built up area of said building which they were free to retain or to transfer to others. There are already agreement to sell by two assessees in respect of portions of built up area to be given to them in favour of builders. But since they continue to be agreements to sell nothing turns upon them. 15. As is evident from terms of so called collaboration agreement what is ultimately brought about is permission by assessees to builders to raise Multi storeyed building on land held by them (the assessee) on lease. This transaction Cannot amount to sale of property to builders because there is no registered document. Secondly, no building has yet been raised on land in question with result that right granted to builders has not actually been exercised. This transaction cannot amount even to lease because lease too if it is for indefinite period has to be registered. Further in lease exclusive possession of lease property has to be delivered to lessee while in case before us what is contemplated is joint possession of multi storeyed building inasmuch as assessees will also occupy parts of proposed building which were to be given to them in consideration of right granted to builders to rais building. What, in our view, is intened to be granted to builders is licence to raise building on land in question which would become irrevocable in terms of s. 60 of Indian Easement Act when licensee (the builders) acting upon licence has executed work of permanent character and incurred expenditure in execution. licence remains revocable till licensee has started construction over licensed property. collaboration agreement thus beings about only licence. Licensee has been defined in s. 52 of Indian Easement Act as under : Where one person grants to another or to definite number of other persons right to do or to continue to do in or upon immovable property of grantor something which would in absence of such right be unlawful and such right does not amount to assessment or interest in property, right is called licence." essential distinction between lease and licence is that in lease there is transfer of interest in land while in case of licence, there is no such transfer that although licensee acquires right to occupy land - sheo Naryan Chaudhary vs. State of Bihar AIR 1957 Pat. 2 26 . Thus under collaboration agreement builder skipper Sales Pvt. Ltd. got merely right to occupy land for sustains of building to be raised therein. We have to see whether conferment of such right by assessees to builder would amount to transfer within meaning of s. 2(47). As already stated above, learned Departmental Representative attempted to bring case within sub-cl. (ii) of s. 2(47) which speaks of "the extinguishment of any rights therein as mode of transfer." According to learned Departmental Representative, person may have various types of rights in property and word 'any' refers to any one or more of those rights. According to learned counsel for assessee on other land, word 'any' does not refer to one of more of assessee on other land, word 'any' does not refer to one of more of various rights that person may have but it refers to entirety of rights that particular person has in property concerned. According to him, in respect of single property various persons may have different types of rights. To illustrate his point, he referred to facts of present case. Government of India is owner of land and is, therefore, vested with all those rights connected with ownership which remain with owner after he leases out land to particular person for particular purpose. According to him, assessees were lessees of land and their rights were different from that of Government of India and builders Skipper Sales Pvt. Ltd. have yet different type of right in respect of land i.e. permission from assessees to raise on land in question multi-storeyed building and to maintain it. According to him, each of three persons has different variety of rights in same property and those rights constituted capital asset in hands of each with result that each may transfer his rights to extent permitted by law. According to learned counsel, transfer must be of entirety of rights that particular person possesses and it is with respect to all those rights that word 'any' has been used. 16. Reliance was placed from both sides on Vania silk Mills (p) Ltd.'s case (supra). In that case fire had demanded assessee's machinery to extent that it could not any longer be put to use as such. machinery was insured and no settlement of insurance claim assessee received certain sum on account of destruction of its machinery which was taken over by insurance company. it was held that on settlement of insurance claim in aforesaid manner, assessee's rights in machinery got extinguished and there was thus transfer of machinery within meaning of s. 2(47) of act by extinguishment of rights therein. Hon'ble High Court observed as below : "Let us proceed to critically examine 'the true import of expression extinguishment of any rights therein' bearing in mind this subject and context. word extinguishment is kingpin of this expression. It is word of ordinary usage having wides import. Usually it connotes end of thing, precluding existence of future life therein (See Black's Law Dictionary, fourth edn., p. 696). It has been variously defined as meaning complete wiping out, destruction, annihilation, termination, cancellation or extinct in and it is ordinarily used in relation to right, title, interest, charge, debt, power, contract or estate (See Corpus jurist Secundum, vol. 35. p. 294). In Rawson's Pocket Law Lexicon, meaning assigned to it is destruction or cessation of right either by satisfaction or by acquisition of one which is greater.' In Ramanlal Gulabchand Shah vs. State of Gujarat AIR 1969 SC 168 at page 175, word extinguishment which is employed in conjunction with expression 'of any such rights' in article 31A of Constitution, was interpreted as meaning 'complete termination of rights'. word 'extinguishment' is here used in similar context namely in combination with expression of any rights therein'. This expression again has wide ambit and coverage. word 'therein' refers to 'capital assets' mentioned earlier in definition. So far as expression 'any rights' is concerned, it was observed by this Court in CIT vs. R. M. Amin (1971) 82 ITR 194 at page 201, while interpreting this very provision : .... word 'any' is word which ordinarily excludes limitation or qualification and it should be given as wide constructions as possible, unless, of course, there is any indication in subject matter or context, words 'any rights' must include all rights ....'." 17. learned Departmental Representative, on other hand, relied upon another observation at page 312 of report, which is as below : It follows from foregoing discussion that legislature in order to effectuate its intention, has deliberately chosen language of widest amplitude by suing expression extinguishment of any rights therein in s. 2(47). It covers every possible transaction which results in destruction, annihilation, extinction, termination, cessation or cancellation, by satisfaction or otherwise, of all or any of bundle of rights - qualitative or quantitative - which assessee has in capital asset, whether such asset is corporeal or incorporeal." In aforesaid paragraphs Hon'ble High Court has no doubt stated that extinguishment can be all or any of bundle of rights which could be interpreted in manner asserted by learned Departmental Representative, but we have to read same with reference to earlier observations, otherwise two observations would be contrary to each other which cannot be reconciled. Capital gains arise out of transfer of capital asset and word transfer has definite notion. mere permission to use property or mere grant of certain permissive right over property cannot amount to transfer although it does result income reduction in bundle of rights of owner of property. For example, person may grant to another right to flow after over his land through definite channel. He may permit another person to open windows towards his land and receive light and air through them. He may grant third person right of way through said land and grant fourth one of right to carry over electric wires over land. All these grants would certainly result in reduction of rights that owner had over land but they cannot, in our view, amount to transfer of property by extinguishment of any rights therein. owner still remains owners of property and so long as he continues to be owner, his rights cannot be extinguished though they may be substantially diminished. 18. In case before is assessees are lease holder in perpetuity of land. What was granted to Skipper Sales P. Ltd. is right to raise multi- storeyed building on land in question. All other rights which lessees have as leasehold right continue to vest in them. licence given to Skipper Sales P. Ltd. will become effective only when building ceased to exist. Suppose builders fail to raise building licence given to them can be terminated by assessee and suppose building raised by builders either by lapse of time or other natural uses ceased to exist, licence may again come to end and assessees or their successors' interest will be able to occupy it again and use it in accordance with terms of lease. It cannot, therefore, be said that by transaction in question, rights of these assessees in property in question stand totally extinguished and transaction amounts to transfer of property. 19. learned CIT (A) has referred to conduct of Skipper Sales P. Ltd. He has stated that they are convincing prospective buyers of flats about their rights in land. What is exact nature of assurance is not disclosed. In any case when building is raised right of person to sustain disclosed. In any case when building is raised right of person to sustain that building on land is guaranteed by s. 60 of Indian Easement Act and, therefore, Skipper Sales P. Ltd. can certainly assure prospective buyers that property purchased by them is not result of act of trespass and would not be removed. If they have been assuring anyone that in due course of time land in question would be got conveyed to company or co-operative society, that too is immaterial. gains arising to assessees, if any, would then be determined according to ultimate transaction that materialises. 20. similar transaction was subject of decision of Bench of this Tribunal in Ashok Kapur (HUF)'s case (supra). In that case it was argued on behalf of Revenue that joint venture between builders and owners amounted to partnership and there was transfer of property to partnership and capital gains had to be calculated on that basis. It was admitted in that case by assessees that they had converted their immovable property into stock in trade on 6th Nov., 1979 but contended that this had not resulted in any transfer within meaning of Act. Tribunal held that on terms of agreement (which was identical with those of cases before us) there was no partnership between owners and builders as each of them dealt with each other on principal basis. It was also held that agreement contemplated continued ownership of assessee in respect of immovable property. In case before us also extinguishment of rights of present assessees as perpetual lessees of land is not intended to be extinguished except of course when leasehold rights are actually transferred to someone in accordance with law. aforesaid judgment of Tribunals in accord with view that we have taken of nature and effect of transaction. learned Departmental Representative referred to Chandrika Prasad Ram Swarup vs. CIT (1939) 7 ITR 26 9 (All) (FB). It was observed "The question of legality or illegality of transaction entered into by firm is totally irrelevant in calculating income, profits or loss incurred by firm in particular year. For example, if assessee-firm had entered into wagering contract which resulted in loss it would not have been open to ITO to decline to take that los into account simple because contract by way of wager was void in law. income assessable to tax is actual income of individual or of firm irrespective of manner in which income was derived. Legality or illegality of transaction culminating in profit or loss is, therefore, foreign to scope of enquiry into income of individual or of firm for purpose of taxing same." learned Departmental Representative contended that in this case parties have skilfully avooided execution of deed of convey ance in gavour of Skipper Sales P. Ltd. with sole object of avoiding capital gains tax and that this could not be permitted. In our view, there is no warrant for such assumption. agreement says that for diverse reasons deed of conveyance could not be executed. ITO has not proceeded on line now sought to be set up by learned Departmental Representative. assessees had stated in their replies that property stood converted into trading asset on date of collaboration agreement and offered to be taxed on profits, if any arising from transaction. ITO, however, did not accepted that it was trading venture and wanted to tad what in his view was capital gains. above principles cannot be applied to case like this where there is no evidence to cheat Revenue and as held by Hon'ble supreme Court in case of Nawab Sir Mir Osman Ali Khan (supra), title has not been transferred for want of proper deed of conveyance. 21. In view of above discussion, we hold that there was no transfer of property No. 22, Barakhamba Road, New Delhi by assessees in favour of builders Skipper Sales P. Ltd. and hence no capital gains has arisen to them on account of moneys received by them. It is important to note that in pursuance of collaboration agreement assessees were to hold certain built up area of proposed multi-storeyed building in consideration of licence to build granted to builders. By another agreement assessees agreed to transfer part of that area of said builders for certain price. What they received in respect of proposed transfer of built up area was thus merely advance towards sale consideration because property which was subject-matter of agreement was yet to come into existence and sale had to be effected only after building had been raised. assessee Atam Prakash and Sons, HUF also received sum of Rs. 1 lakh as security for performance of act. No amount was received as consideration for transfer in presenti of any capital asset and hence no capital gains could arise to assessee. We, therefore, hold that no capital gains had arisen to any of two assessees and direct that amounts included in income of two assessees on account of capital gains be excluded. 22. In ground of appeal assessee has made grievance of charge of interest u/s 215/217 of act as well. This was agreed to be consequential and chargeability of interest under two sections will be looked into again by ITO while giving effect to present order. In result, appeals of assessees are allowed. *** ATAM PRAKASH & SONS (HUF) v. INCOME TAX OFFICER